- Information is the strongest driver of corporate politics. Having information conveys power and people will trade power or favors for information.
- In a political environment, not only is time wasted on politics, good people leave because they feel they have lost the political battle and decisions are not always taken on merit.
- The best solution to fight politics is transparency. The more widely disseminated information is within a company, the less incentive there will be for corporate politics.
Most business leaders talk about and thrive to build a meritocracy where there are no politics, yet politics often dominate companies large and small. In fact, I have never seen a company in favor of a political environment. I have worked in tiny start-ups and some of the largest companies in the world, however, and politics are often a problem. Unfortunately, even one company that I co-founded in retrospect had a much bigger issue with politics than I realized at the time. In a political environment, not only is time wasted on politics, good people leave because they feel they have lost the political battle and decisions are not always taken on merit.
Information is power
What I understand now is that the biggest driver of company politics is information. The more a company restricts the flow of information about strategy, performance, the movement/promotion of people, etc., the greater the level of corporate politics.
Lack of transparency breeds information is power syndrome. There are several reasons why information leads to politics:
- Information becomes a commodity, and with any commodity is has a value. People naturally want to know what is happening at their company, whether it means if they are opening a new office or promoting a new SVP. With anything people want, they will pay for it. Rather than paying with money, in a corporate setting they will pay with support or other information. Effectively, they will buy the information with other information or with favors that may or may not be in the overall corporate interests.
- Those with information have more power. Since people are willing to provide value for information, those with the information are able to generate support for their goals. This provides the holders of information to form coalitions that further their interests.
- Information creates prestige. Since information is a conduit to power, it also becomes a symbol of prestige. To know something that others do not know implies you are more powerful than those who are “ignorant.”
- Watching virtually any election in the world, it is clear people will do almost anything to protect their power. If the corporate environment has created an atmosphere where information is power, then people will protect their privilege to hold information. They will advocate for tighter information streams, though always with them having access to the information. They will also aggressively criticize those who share information (again, outside of themselves) because any information sharing devalues what they hold. They will also often look for justification (labor law, securities regulation, etc) to limit information flows.
Transparency trumps politics
It is not rocket science to conclude the best solution to fight politics is transparency. The more widely disseminated information is within a company, the less incentive there will be for corporate politics. Thus, you need to look closely at any information you are not sharing broadly and determine if there is a good reason not to share (rather than looking for a good reason to share). If someone claims regulatory or legal reasons, push back, especially if other companies share similar information. If you change the environment, information will not drive power, merit will.